Hope is dwindling for a non-profit news operation in LA *

The LA Times no longer owns its building at 1st and Spring streets downtown. LA Observed file photo.For the Record: I mixed two groups together. My bad, completely. The group Wolinsky was working with is not Austin Beutner and Eli Broad. Wolinsky did not name the investor in his Zocalo piece. Previous reports at LA Observed and elsewhere have mentioned Tom Unterman, an LA investor who was interested in starting a news non-profit here. The post below has been edited.

Leo Wolinsky, the former managing editor of the Los Angeles Times and editor at Variety who was a key part of an effort to start a non-profit news operation in LA, says that effort has quietly shut down. "Financially unsustainable," Wolinsky writes at Zocalo Public Square. By the way, he's the first analyst I've seen put in writing that the vast appetite for grants to finance news beats at KPCC sucks up the philanthropic money that might otherwise fund more creative alternatives in Southern California. (He notes that the LA Times also funds some of its reporting now with non-profit grants.)

From Wolinsky's piece:

For me, a lifelong journalist and former managing editor of the Los Angeles Times, the experiment’s sudden end felt like the media’s version of a canary in the coal mine. If this idea couldn’t survive despite support from one of the city’s most financially connected entrepreneurs, what could?...

It turns out the money men are looking for startups that deliver a very large and preferably young audience, or better yet, a “killer app” that has the potential to disrupt or destroy an existing business and to return their investments tenfold—and in a hurry. Simply building a better mousetrap is not enough.

Delivering a mass audience in the Internet era often means playing to the lowest common denominator—outrageous and often vitriolic speech, wild and unsubstantiated gossip, amateur journalism and, more than anything else, a focus on celebrity in almost any form.

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There are few, if any, news-oriented websites here in Los Angeles—or just about anywhere in the nation—that turn enough of a profit or are likely to do so in the foreseeable future. It’s a struggle for even nonprofit newsrooms to raise sufficient charitable contributions just for operating costs....

The public radio station KPCC has also dramatically expanded its fundraising to build a large web newsroom in an attempt to take over some of the real estate left by a retreating Times. The effort has helped propel the station’s web traffic, but it remains well behind the Times. In part, this is because KPCC’s brand is so associated with radio that people don’t see it as their likely source for web-based news.

The station’s efforts have had an unintended impact that may be even more important: They have soaked up so much of the charitable funds available in Southern California for news that other nonprofit publishers will find it ever more difficult to raise money.

Wolinsky says also that he sees Aaron Kushner of the Register now as "one of the most likely candidates" to buy the LA Times — because he already has a newspaper and thus can provide the business functions like advertising and circulation that the Tribune has stripped from the Times company, along with assets such as the downtown headquarters in which the LAT is now just a tenant.